Legal Market Overview
Puerto Rico’s economic outlook began to improve in 2021, and 2022 was a continuation of that optimistic sentiment, with GDP expected to grow by 3.7% for the financial year. This culminated with the restructuring of the Commonwealth’s debt, reducing claims against the Puerto Rican government from $33bn to $7.4bn, and its formal exit from its nearly five-year bankruptcy in March 2022.
The island emerges from bankruptcy at a time when federal hurricane reconstruction relief, COVID-19 funds, and healthcare and tourist businesses are all contributing towards a wave of optimism for the future. In particular, the manufacturing industry, which accounts for roughly 48% of Puerto Rico’s GDP, together with tourism and professional services, is expected to drive most of the future growth. The COVID-19 outbreak also brought attention to the island’s bioscience sector, as Puerto Rico is home to around 50 pharmaceutical plants. Tourism enjoyed a record-breaking year in 2021, as mainlanders who were unable to access travel overseas flocked to the Caribbean resort on domestic flights.
At the same time, the island’s significant tax benefits (which include a 100% exemption on personal property taxes and dividends from export services) are luring a new generation of service-export firms as the work-from-anywhere trend grows, as well as enticing high-net-worth individuals to relocate from the US. The influx of the wealthy is driving real estate deals, which are skyrocketing. On the other hand, the pace of litigation is still affected by the pandemic, and the island’s exit from bankruptcy, which previously generated a substantial number of disputes each year, will also create challenges for litigators.
O’Neill & Borges and McConnell Valdés LLC have established themselves as two of the largest and most prominent law firms in Puerto Rico, with a full-service offering, while other key names include Pietrantoni Méndez & Alvarez LLP, Ferraiuoli LLC, Cancio Covas & Santiago LLP, Estrella LLC and Goldman Antonetti & Córdova.